Staples 2006 Annual Report Download - page 85

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15
Most of the existing facilities are leased by us with initial lease terms expiring on dates between 2007 and 2024. In
most instances, we have renewal options at increased rents. Leases for 169 of the existing stores provide for contingent
rent based upon sales.
Our Framingham, Massachusetts corporate office is owned by us and consists of approximately 650,000 square feet.
Item 3. Legal Proceedings
From time to time, we may be subject to routine litigation incidental to our business.
As previously disclosed, various class action lawsuits have been brought against us for alleged violations of what is
known as California’s “wage and hour” law. The first of these lawsuits was filed on October 21, 1999. These cases were
subsequently consolidated as the “Staples Overtime Cases,” Superior Court for the State of California, County of
Orange, Civil Complex Center (Judicial Council Coordination Proceeding No. 4235, Lead Case No. 816121). The
plaintiffs have alleged that we improperly classified store managers as exempt under the California wage and hour law,
making such managers ineligible for overtime wages. Staples and the general manager class have reached a tentative
settlement. The settlement requires court approval. The case involving assistant store managers is unaffected by the
settlement. The plaintiffs are seeking to require us to pay overtime wages to the putative class for the period from
October 21, 1995 to the present. The court has granted class certification to the plaintiffs. The court’s ruling is
procedural only and does not address the merits of the plaintiffs’ allegations. The trial date for the case has been
scheduled for November 2007. We believe we have meritorious defenses in the litigation and expect to prevail. If,
however, there is an adverse judgment from which there is no successful appeal, damages could range from $10 million
to $150 million, excluding interest and attorneys’ fees.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of our security holders during the fourth quarter of fiscal 2006.
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock is traded on the NASDAQ Global Select Market under the symbol “SPLS”.
At February 23, 2007, the number of holders of record of our common stock was 6,913.
The following table sets forth for the periods indicated the high and low sales prices per share of our common stock
on the NASDAQ Global Select Market, as reported by NASDAQ and reflecting the three-for-two common stock split
that was effected in the form of a common stock dividend distributed on April 15, 2005.
High Low
Fiscal Year Ended February 3, 2007
First Quarter........................................................... $ 26.79 $ 22.31
Second Quarter........................................................ 27.71 21.57
Third Quarter.......................................................... 27.04 21.08
Fourth Quarter ........................................................ 28.00 24.94
Fiscal Year Ended January 28, 2006
First Quarter........................................................... $ 22.02 $ 18.64
Second Quarter........................................................ 23.84 18.87
Third Quarter.......................................................... 23.24 20.36
Fourth Quarter ........................................................ 24.14 21.90
While we will continue to retain earnings for use in the operation and expansion of our business, in 2004 we decided
to return cash to our stockholders by initiating a cash dividend. Our first cash dividend of $0.13 per outstanding share of
our common stock was paid on May 17, 2004. Thereafter, we paid an annual cash dividend of $0.17 per share of our
outstanding common stock on April 14, 2005, and an annual cash dividend of $0.22 per share of our outstanding common
stock on April 20, 2006. On March 1, 2007, we announced that we would pay a cash dividend of $0.29 per share on
April 19, 2007 to shareholders of record on March 30, 2007. Our payment of dividends is permitted under our revolving